The opinion of the court was delivered by: JAMES ZAGEL, District Judge

MEMORANDUM OPINION AND ORDER

On October 1, 2000, the parties here entered into a series of
lease agreements under which Defendant/Counter-Plaintiff Re-Box
Packaging, Inc. ("Re-Box") agreed to lease from
Plaintiff/Counter-Defendant IFC Credit Corporation ("IFC") three
machines called Measurex MX Open Process Controls Systems
(hereinafter the "equipment") used to manufacture paper. IFC had
previously leased the equipment to Tenneco at its mill in Filer,
Michigan. At the termination of the lease to Tenneco, the
equipment was decommissioned and shipped to Process Controls, a
company specializing in marketing pulp and paper equipment
located in Chardon, Ohio, Re-Box agreed to lease the equipment
from IFC and it was shipped from Chardon to Re-Box's plant in De
Pere, Wisconsin. At some point, Re-Box ceased making payments to
IFC, whereupon IFC filed suit against Re-Box for breach of the
commercial lease agreement. Also named as defendants to the
proceedings were Partners Development, Inc. and Ron Van Den
Hevel, both of whom guaranteed Re-Box's obligations under the
lease agreement. Re-Box filed a second amended counterclaim
against IFC and Patrick Witowski, one of IFC's corporate officers
and owners.

IFC and Witowski now move to dismiss the second amended
counterclaim pursuant to Federal Rule of Civil Procedure
12(b)(6). The purpose of a Rule 12(b)(6) motion is to test the
sufficiency of the complaint, not the merits of the case. See
Autry v. Northwest Premium Servs., 144 F.3d 1037, 1039 (7th Cir.
1998). Dismissal of the counterclaim is appropriate only if it
appears beyond a doubt that Re-Box can prove no set of facts in
support of its claims that would entitle it to relief. GATX
Leasing Corp. v. Nat'l Union Fire Ins. Co., 64 F.3d 1112, 1114
(7th Cir. 1995). In ruling on Rule 12(b)(6) motion, I must accept
all well-pleaded factual allegations in the counterclaim as true
and draw and all reasonable inferences from those facts in
Re-Box's favor. See Cleveland v. Rotman, 297 F.3d 569 (7th Cir.
2002).

Contractual Waiver of All Counterclaims

IFC first argues that Re-Box may not pursue any counterclaims
against IFC because Re-Box specifically waived its right to do so
in Paragraph 17 of the lease agreement. Re-Box responds that its
claim of fraudulent inducement in Count I would, if it prevails,
render the agreement voidable at the option of Re-Box, thus
voiding any waivers, and that its claim under the Illinois Fraud
and Deceptive Business Practices Act in Count II is also exempted
from any waiver, Accordingly, before determining whether Re-Box has waived
its right to pursue any counterclaims, I must determine whether
Count I or Count II should be dismissed.

Count I: Fraudulent Inducement

In Count I, Re-Box has alleged that Witowski made certain
statements to Van Den Heuval during the parties' negotiations
that Witowski knew were false, that Witowski intended Van Den
Heuval and Re-Box to rely upon those statements to induce Re-Box
to enter the lease agreement and to sign a Certificate of
Acceptance, and that Van Den Heuval and Re-Box relied upon those
statements to the detriment of Re-Box. To state a cause of action
for fraudulent inducement under Illinois law, Re-Box must plead:
(1) a false statement of material fact; (2) knowledge or belief
of the falsity by the party making it; (3) an intention to induce
the other party to act; (4) action by the other party in reliance
on the truth of the statements; and (5) damage to the other party
resulting from such reliance. Neptuno Truehand-Und
Verwaltungsgesellschaft MBH v. Arbor, 692 N.E.2d 812 (Ill. App.
Ct. 1998). IFC argues that Re-Box has "failed to establish the
second element required for fraudulent inducement, that of
knowledge or belief" or "that any of Witowski's statements were
false," the first element. In support of this argument, IFC
points to four non-party depositions and documentary evidence
obtained during discovery.

"If matters outside the pleadings are presented by [a movant],
a District Court may either exclude those documents and continue
under Rule 12 or convert the Rule 12(b)(6) motion into a summary
judgment motion and proceed under Rule 56." Northwestern Corp.
v. Y.L.C. Co., No. 03 C 2408, 2003 U.S. Dist. LEXIS 17874, at *4
(N.D. Ill. Oct. 7, 2003); see also Marques v. FRB,
286 F.3d 1014, 1017 (7th Cir. 2002) (holding that a Rule 12(b)(6) motion
was converted into a motion for summary judgment when materials outside the
complaint were actually considered by the court). In
Northwestern, however, because the motion did not comply with
Rule 56 or the Local Rules of this Court concerning summary
judgment, the Court declined to convert the motion to dismiss
into a motion for summary judgment. 2003 U.S. Dist. LEXIS 17874,
at *4, I do so here as well, despite Re-Box's assertion that the
motion "may be treated as a motion for summary judgment." If IFC
desires to move for summary judgment on the counterclaim, then it
should do in accordance with the Federal and Local Rules.

In treating IFC's motion as a Rule 12(b)(6) motion to dismiss,
I must ignore external facts not found in Re-Box's counterclaim.
See Levenstein v. Salafsky, 164 F.3d 345, 347 (7th Cir. 1998).
It is well accepted that "[d]ocuments that a defendant attaches
to a Rule 12(b)(6) motion to dismiss may only be considered if
they are referred to in the plaintiff's complaint and are central
to the plaintiff's claim." Northwestern, 2003 U.S. Dist. LEXIS
17874, at *3. Therefore, accepting all of Re-Box's well-pleaded
factual allegations as true, see Cleveland, 297 F.3d 569,
dismissal of Count I is inappropriate because it may be possible
for Re-Box to prove a set of facts in support of the claim, see
GATX Leasing Corp., 64 F.3d at 1114. Accordingly, Count I will
not be dismissed and, because of that, the counterclaim in its
entirety will not be dismissed on the basis of Re-Box's alleged
waiver of any rights to a counterclaim. See Schwaner v.
Belvidere Med. Bldg. P'ship, 508 N.E.2d 522, 529 (Ill.App. Ct.
1987); Bell & Howell Fin. Servs. Co. v. St. Louis Pre-Sort,
Inc., No. 97 C 6063, 1999 U.S. Dist. LEXIS 512, at **11-12 (N.D.
Ill. Jan. 7, 1999). Count II: Consumer Fraud

Count II of Re-Box's second amended counterclaim alleges that
IFC violated the Illinois Consumer Fraud and Deceptive Business
Practices Act ("Consumer Fraud Act"), 815 ILCS 502/2, by
misrepresenting the equipment which it leased to Re-Box and by
failing to tell Re-Box of IFC's prior litigation with Tenneco on
Tenneco's prior lease of the equipment. IFC argues that Count II
should be dismissed because: (1) any claim under the Consumer
Fraud Act is barred by the statute of limitations; and (2) the
information allegedly withheld from Re-Box was a matter of public
record.

The Consumer Fraud Act provides that any action must commence
"within three years after the cause of action accrued." 815 ILCS
505/10a(c). Claims accrue on the date when the plaintiff knows or
reasonably should know of the injury, and knows or reasonably
should know that the injury was wrongfully caused. Midland Mgmt.
Corp. v. Computer Consoles, 837 F. Supp. 886 (N.D. Ill. 1993).
IFC claims that the equipment which was the subject of the lease
agreement between the parties was delivered to Re-Box on December
20, 2000, and that a representative of Re-Box discovered damage
to the equipment and then notified Witowski of the damage that
very same day. IFC claims that the three-year limitations began
to accrue on this day, and then expired on December 20, 2003 
nearly four months before Re-Box filed its counterclaim. However,
although damage was detected on December 20, 2000, Re-Box alleges
that it was not until on or after March 15, 2001 that it
discovered that in addition to the aforementioned damage, the
equipment was also missing components essential to operation of
the equipment. Moreover, it was not until well after March 15,
2001 that Re-Box discovered that IFC had sued Tenneco for
Tenneco's hold-over of the equipment after the term of the Tenneco lease. Nonetheless, in the best case scenario, March 15,
2001 is the earliest date at which to trigger the limitations
period here, and because Re-Box filed its counterclaim on March
11, 2004, there is no statute of limitations problem.

IFC also argues that it should not be liable under the Consumer
Fraud Act for a failure to disclose "other litigation involving
the subject of the lease," since the litigation is a matter of
public record. Re-Box, in fact, makes a much narrower claim 
that IFC's failure to disclose its litigation with Tenneco
concerning the equipment constitutes statutory fraud because
Tenneco's legal duty to return all the equipment described in the
lease was at issue in the prior case. Re-Box alleges that had it
known of the prior litigation and the dispute of whether Tenneco
had returned all the equipment described in the lease, Re-Box
could have made inquiry of the completeness of the equipment. The
non-disclosure is alleged to have aided the IFC/Witowski
deception. IFC allegedly omitted a material fact applicable to
its lease transaction with IFC, and "omission of any material
fact . . . [is] hereby declared unlawful" under the Act. 815 ILCS
505/2. Because it is possible that Re-Box could prove a set of
facts showing that this particular omission was material,
dismissal of the claim on this basis is inappropriate. And while
an omission of law appears to not be actionable under the Act,
see Notaro Homes, Inc. v. Chicago Title Ins. Co.,
722 N.E.2d 208 (Ill.App. Ct. 1999); Randels v. Best Real Estate,
791 N.E.2d 553 (Ill.App. Ct. 1993), there is no clear prohibition of
an omission of fact  even if public  being actionable. Count III: Breach of Express Warranty

In Count III, Re-Box alleges that Witowski made and breached
oral express warranties that: (1) the equipment, complete as it
had been operating at Tenneco's mill, had been removed from
Tenneco's mill in a professional manner; (2) the equipment had
been crated and packed in a professional manner; (3) IFC would
ship the equipment to Re-Box at a later date in a commercially
reasonable and professional manner; and (4) Re-Box would not
receive and accept the equipment until it was delivered to
Re-Box's warehouse. IFC argues that this count should be
dismissed because the lease agreement contains an integration
clause stating that it and all the attachments and schedules
constitute the entire agreement between the parties and that
"[a]ny representations, promises or conditions not contained in
the aforementioned documents or documents executed in connection
herewith or therewith shall not be binding unless in writing and
signed by duly authorized representatives of each party."
Moreover, under the lease agreement, Re-Box agreed to waive all
warranties, express or implied. IFC argues that because the
warranty waivers were never modified in writing, Re-Box can hold
no claims against IFC for breach of any express or implied
warranties.

As an initial matter and as discussed above, if Re-Box prevails
on its claim of fraudulent inducement in Count I, this would
allow Re-Box to vitiate the lease agreement and render it
voidable, thus voiding any waivers and integration clauses.
Accordingly, Count III for breach of the oral express warranties
cannot be dismissed on the basis of any waivers or integration
clauses contained in an agreement which Re-Box may be able to
render void.

In addition, although "[a] signed lease agreement that excludes
modification . . . except by a signed writing may not be
otherwise modified," 815 ILCS 5/2A-208(2), "an attempt at modification or rescission . . . may operate as a waiver," 815
ILCS 5/2A-208(3). Re-Box has alleged that such 2A-208(3)
modifications have occurred here. Re-Box has alleged that by
attempting to orally modify the lease agreement by making the
oral express warranties described above, IFC has waived strict
compliance with the integration clause and/or any warranty
waivers in the lease agreement. Accordingly, Count III cannot be
dismissed because Re-Box may be able to prove a set of facts
showing that IFC has waived strict adherence to the lease
agreement, that IFC did indeed make oral express warranties, and
that IFC subsequently breached these warranties.

Count IV: Breach of Contract

In Count IV, and in the alternative to Counts I-III, Re-Box
alleges that IFC breached the delivery conditions of a late
delivery agreement with Re-Box, Re-Box alleges that the late
delivery agreement is a separate and distinct contract from
Re-Box's lease with IFC. The terms of the agreement are that
Re-Box would take delivery of the equipment months after making
initial lease payments, and IFC, at its expense, would crate,
store, and ship the equipment to Re-Box in a commercially
reasonable and professional manner. Re-Box alleges that IFC
breached the agreement by failing to crate, store or ship the
equipment in a commercially reasonable and professional manner.
Re-Box alleges that it complied with all of its responsibilities
under the agreement, and it has been damages as a result of IFC's
breach.

IFC claims that Count IV must be dismissed because it is an
attempt to enforce an oral lease agreement between the parties
for an amount more than $1,000, but that under the statute of
frauds, such leases must be in writing, 810 ILCS 5/2A-102. IFC
claims that because this alleged agreement is not in writing, Count IV fails to state a claim upon
which relief may be granted. However, the alleged late delivery
agreement between IFC and Re-Box did not create a lease. A lease
is a "transfer of the right to possession and use of the goods
for a term in return for consideration." 810 ILCS 5/2A-103(j).
The late delivery agreement addresses only delivery of the
equipment, and not the transfer of the right to possess and use
the equipment for a specific turn in return for an agreed upon
rent. Since the late delivery agreement does not create a lease
therefore, it is not subject to the statute of frauds.

In addition, IFC belatedly argues in its reply that even if not
considered a lease in violation of the statute of frauds, Count
IV should nonetheless be dismissed because it is another oral
agreement modifying the lease agreement in violation of the
agreement's integration clause barring oral modifications. Once
again, however, if Re-Box prevails on its claim of fraudulent
inducement in Count I, Re-Box could render the agreement's
integration clause voidable. Accordingly, Count IV cannot be
dismissed.

For the reasons above, IFC and Witowski's Motion to Dismiss
Defendant's Second Amended Counterclaim Pursuant to Rule 12(b)(6)
is DENIED.

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